Monday, January 29, 2018

US Freight Spending, Shipments, Rates & Costs all Surge

A trend is emerging, links below.
From Wolf Street:
Transportation Recession of 2015 and 2016 is just an Ugly Memory.
The transportation recession of 2015 and 2016 has receded into memory, and the trucking industry is hopping and railroads are getting their share, rates are surging, and so are costs, and the money is flowing. The Cass Freight Index, which tracks US shipment volumes by all modes of transportation, rose 7.2% year-over-year in December, to the highest level for any December since 2007.

The Cass Freight Index is not seasonally adjusted, with peaks in early summer for back-to-school season and in September during shipping season ahead of the holiday sales season. December marks the end of shipping season, and shipments normally plunge from November. But in December 2017, instead of plunging, shipments barely edged down from November. In the chart, the difference between 2017 (red line with black markers) and 2016 (black line with red markers) shows the severity of the transportation recession and the powerful recovery since:
The green line in the chart above represents 2014, which had been a banner year for US transportation until it began to unravel at the end of 2014 and descended into the full-blown transportation recession covering much of 2015 and 2016.

The index is based on “more than $20 billion” in annual freight transactions, according to Cass Information Systems. It does not cover bulk commodities, such as oil and coal but is focused on consumer packaged goods, food, automotive, chemical, OEM, and heavy equipment, shipped via truck, rail, barge, and air....MORE
If interested see also:
Dec. 21
Economic Indicators: "Truck tonnage is impressive"
Nov. 28
Signposts: Trucking Looking Very Good
Sept. 26
Inflation: "For truckload carriers and their customers, the moment of truth has arrived"
When prices start rising this deep in the logistics pipeline the effects can be economy-wide, Mr. Bezos.
From the supply chain mavens at DC Velocity:

Sustained pickup in freight demand will push tight truck supply over the edge, driving up rates, experts say....